Federal inventionINDEX September 2026: 1.58% (B+ grade)

The inventionINDEX measures innovation output by comparing GDP growth with patent production growth.

Anything over C grade is positive sentiment; anything under C is negative outlook/sentiment. Using that sentiment, it is possible to observe trends over time, and also compare states/countries. In doing so, we can predict which states have the best chance to recover economically from the pandemic (or any other economic incident that may occur).

Historical Federal inventionINDEX Scores

The Federal inventionINDEX score for the past 12 months is shown in the table below.

The Federal inventionINDEX registered a score of 1.58% with a B+ rating in September 2026, marking a notable upward trajectory over the preceding two months. After reaching a low of 1.05% with a C rating in April 2026, the index demonstrated resilience, regaining momentum through June at 1.65% and stabilizing above its historical average of approximately 1.54%. The latest reading surpasses both July’s 1.28% (B-) and August’s 1.48% (B), signaling a progressive quarterly recovery in output.

Contextualizing September 2026 within the broader historical window highlights where the current score sits relative to past cyclical peaks and troughs. The overall dataset records significant movement, ranging from an all-time high of 2.31% (A+) in October 2023 to the floor observed in April 2026. While current figures remain below historical high-water marks such as January 2024 at 2.03% or August 2023 at 2.20%, the 1.58% score positions the index solidly within the upper tier of B ratings, aligning closely with previous stable periods such as March 2025 and January 2025.

Sustaining higher inventionINDEX scores and securing top-tier ratings yield substantial structural advantages across the research and industrial landscape. A high grade reflects elevated intellectual property filing density, efficient commercialization of federally funded research, and robust interdisciplinary collaboration. Strong performance in the index serves as a positive signal to private sector investors and venture capital firms, encouraging increased capital allocation, accelerating technology transfer, and strengthening long-term competitive standing.

Conversely, lower scores and diminished ratings introduce severe strategic and economic liabilities. A decline into lower tiers indicates bottlenecks in research translation, reduced patenting velocity, or waning institutional support for early-stage development. Persistent low performance risks eroding stakeholder confidence, stymieing capital flow, and causing vital technological breakthroughs to stall before reaching full market integration, thereby weakening innovation capacity.

Discussion:

In September, the Federal inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the upward trend for the year. This is in contrast to the prior 12 months, which experienced a slight downward trend.

As the economy continues to stabilize in the post-pandemic era, it remains uncertain whether any backlog of applications still exists or if the department has returned to normal processing timelines. The inventionINDEX could also be affected by lingering consequences from the pandemic, such as company closures, reduced workforces, and limited R&D capabilities, which may still be impacting current operations.

Learn More:
Are you thinking of patenting any of your bright ideas? Did you know your research work could be eligible for the R&D Tax Credit and you can receive up to 14% back on your expenses? To find out more, please check out our free online eligibility test.

Swanson Reed provides R&D tax credit consulting and advisory services to companies in all 50 U.S. States.

Feel free to book a quick teleconference with one of R&D tax specialists if you would like to learn more about R&D tax credit opportunities.

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